California Energy Efficiency Permits on the Rise

Single- and multi-family unit production has picked up in California, but new residential building isn’t the only form of construction work to intensify in recent months. Solar installations and HVAC changeouts are taking center stage as permit issuance frontrunners, bringing a whole new “energy” to statewide building statistics.

Construction Industry Research Board (CIRB) has been tracking HVAC and solar statistics for their innovative Energy Permit Summary report since January of 2014. From the first round of energy data collected over 18 months ago, CIRB has seen month-to-month fluctuations in HVAC and mechanical permit activity, and has noted a gradual increase in photovoltaic, or solar, permit issuance since day one. As solar progresses into a more affordable energy alternative, residential and commercial installations will become favorable, thus increasing the levels of monthly construction permit applications.

The most recent reported month of June 2015 revealed a total of 9,823 solar permits issued in California, a 14.15 percent increase in activity compared to May 2015, and a 64.7 percent increase from June 2014. Solar permits reported in March, April and May of this year all reached 8,000 or more total statewide installations, whereas statistics from the same three months in 2014 remained between 4,400 and 5,200.

One of the highest peaks in solar activity (as seen in Table 1) is noted in October 2014, where total installations amassed 8,249 permits, nearly matching the 8,259 new single- and multi-family housing units reported that same month.

Table 1 also shows a correlative increase over the last year and a half in both new housing units and solar installations. According to California Building Industry Association (CBIA)’s Senior Engineer, Robert Raymer, solar permit issuance has been consistently rising over the last year and will continue to rise in the years to come. “This is due in large part to the success of the Energy Commission’s New Solar Homes Partnership program and the state’s aggressive policy goal of having all new homes ‘zero net energy’ by the year 2020,” says Raymer.

HVAC changeout data have also revealed some general increases over time, though not at the rate of solar installations. The month of June reported the highest amount of statewide HVAC and mechanical permit issuance to date with 5,759 total changeouts, a 38 percent increase from the 4,172 changeouts gathered from May 2015.

Energy permits surpassed new dwelling unit figures in year-to-date statistics. Statewide new single-family dwellings increased by 17.6 percent in production from 19,416 units in June 2014 to 22,834 total new units in June 2015; HVAC changeouts year-to-date have increased by 43.5 percent from 14,404 to 20,675 total changeouts. Solar, in comparison, revealed a 69 percent increase from 28,305 installations in June 2014 to 47,837 in June 2015.

CIRB has also been tracking the monthly issued large projects in California (valued at over $5 million) pertaining to the construction of new solar fields and farms. These permits are not only becoming more frequent in building reports from municipalities and unincorporated areas, they are proving to be very high in construction valuation.

For instance, SunEdison (North America) was issued a $38.8 million permit for a new solar plant in the City of Hemet (Riverside County) in March of this year. The most costly solar permit of 2015 was issued in June in Kern County Unincorporated for a new $80.1 million, 40-megawatt solar panel structural system for Kingbird Solar. On average, one large solar-related permit is issued per month to a California municipality or unincorporated region.

It is evident that energy permit issuance throughout California is gaining momentum, and Raymer believes we will see steady increases in both solar and HVAC permit activity as contractors and building officials become more familiar with new regulations.

Unpermitted construction occurring monthly on HVAC and solar systems will continue to hinder total accuracy in statistical reporting, but these increases in permit activity are still a significant reflection of the upward trends in utilizing efficient and renewable methods of energy consumption.

Allison Paul is the lead analyst and media specialist for the Construction Industry Research Board, a monthly statistical service provided by the California Homebuilding Foundation. She may be reached at CHF-CIRB@mychf.org.